The frontlight is partially reflective on the inside, like a one-way mirror. It's VERY partially, but if it wasn't at least a little reflective, it wouldn't really work. I think this screws with the reflection of ambient light off the LCD when playing without the frontlight turned on.
I'm not an optics expert, but this is the only reason I can think of that everybody with an FLU says "How can you possibly use a GP32 without a FLU?!?" I have a non-FLU, and it works just fine for me. The only time I really had a problem with light was when I was playing outside AFTER sunset. The screen is much easier to see than my GBA in any conditions.